BILL ANALYSIS Ó
SENATE COMMITTEE ON EDUCATION
Senator Carol Liu, Chair
2015 - 2016 Regular
Bill No: AB 2506
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|Author: |Thurmond |
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|Version: |May 27, 2016 Hearing |
| |Date: June 22, 2016 |
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|Urgency: |No |Fiscal: |Yes |
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|Consultant:|Lynn Lorber |
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Subject: Student financial aid: Chafee grant awards
SUMMARY
This bill provides that an eligible current or former foster
youth is entitled to receive a Chafee grant award, and requires
postsecondary education institutions to meet eligibility
requirements to receive Chafee funds, similar to existing
provisions of the Cal Grant program.
BACKGROUND
Existing law:
1) Establishes the California Student Aid Commission for the
purpose of administering specified student financial
programs.
(Education Code § 69510, et seq.)
2) Establishes requirements for postsecondary education
institutions to participate in the Cal Grant program, and
requires, for the 2012-13 and subsequent academic years, an
institution to maintain a graduation rate above 30% and a
three-year cohort student loan default rate of less than
15.5%. (EC § 69432.7)
3) Establishes the federal John H. Chafee Foster Care
Independence Program to provide, among other benefits,
education and training vouchers to qualifying current and
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former foster youth. (United States Code, Title 42, § 677)
ANALYSIS
This bill provides that an eligible current or former foster
youth is entitled to receive a Chafee grant award, and requires
postsecondary education institutions to meet eligibility
requirements to receive Chafee funds, similar to existing
provisions of the Cal Grant program. Specifically, this bill:
Chafee grant entitlement
1) Provides that, beginning with the 2017-18 academic year, a
current or former foster youth is entitled to a Chafee
grant award.
2) Requires the California Student Aid Commission (CSAC) to
allocate the Chafee award if the current or former foster
youth meets both of the following criteria:
a) He or she meets the existing Chafee
grant requirements. (See #2 in Comments.)
b) He or she submits a Free Application
for Federal Student Aid and a Chafee grant application
between January 1 and September 2 each year for the
academic year beginning in the fall of that calendar
year.
3) Provides that the amount of any individual Chafee grant
award depends on the cost of attendance at the qualifying
institution at which the student is enrolled.
4) Prohibits the award amount from exceeding the amount of the
calculated financial need for each student.
Standards for qualifying institutions
5) Establishes the standards for postsecondary educational
institutions to be classified as qualifying institutions
for the purposes of the Chafee Educational and Training
Voucher program, to the extent permitted by federal law.
6) Requires the CSAC to certify annually by October 1 a
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postsecondary educational institution's latest three-year
cohort default rate and graduation rate as most recently
reported by the United States Department of Education.
7) Requires the following standards to apply in determining an
institution's eligibility for the use of initial and
renewal Chafee grant awards by its students:
a) Provides that an otherwise qualifying
institution with a three-year cohort default rate that
is 15.5% or higher, as certified by the CSAC, is
ineligible for the use of Chafee grant awards.
b) Authorizes an otherwise qualifying
institution that becomes ineligible to regain
eligibility for the subsequent academic year after
satisfying a) - d). This bill provides that an
institution is to immediately regain its eligibility
if the United States Department of Education corrects
or revises the institution's three-year cohort default
rate or graduation rate such that the requirements in
a) - d) are met.
c) Provides that an otherwise qualifying
institution for which no three-year cohort default
rate or graduation rate has been reported is
provisionally eligible for Chafee grant awards until a
three-year cohort default rate or graduation rate has
been reported for the institution by the United States
Department of Education.
d) Provides that, beginning with the
2017-18 academic year and annually thereafter, an
otherwise qualifying institution with a graduation
rate of 30% or less for students taking 150% of less
of the expected time to complete
degree requirements, as reported by the United States
Department of Education and certified by the
California Student Aid Commission (CSAC), is
ineligible for the use of Chafee grant awards.
8) Exempts from these standards institutions:
a) With 40% or less of undergraduate
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students borrowing federal student loans, using
information reported to the United States Department
of Education for the prior two academic years.
b) Located outside of California.
9) Provides that provisions relative to the standards for
qualifying institutions are not to preclude an eligible
Chafee grant recipient who chooses to attend an institution
outside of California from using Chafee funds at that
institution.
California Student Aid Commission
10) Requires the California Student Aid Commission (CSAC) to do
all of the following:
a) Notify initial or renewal recipients
seeking to attend, or attending, an institution that
is ineligible for Chafee grant funds that the
institution is ineligible for the use of initial
awards for the academic year for which the student
received the initial award.
b) Provide initial and renewal Chafee
grant recipients seeking to attend, or attending, an
institution that is ineligible for Chafee grant awards
with a complete list of all California postsecondary
educational institutions at which the student would be
eligible, pursuant to state standards for qualifying
institutions, to receive an unreduced Chafee grant
award.
Miscellaneous
11) States legislative findings and declarations relative to
limited access to the Chafee grant, the importance of
quality education, and the poor educational outcomes for
foster youth.
STAFF COMMENTS
1) Need for the bill. According to the author, "AB 2506 is
seeking to address the low rates of college persistence and
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completion among youth in foster care. There are two
deficiencies in current law: the first is a lack of
financial support for current and former foster youth who
are attending college. Unfortunately, the funding
available to the Chafee Education and Training Vouchers
(ETV) is inadequate to meet the current demand. In the
2014-15 school year, 4,609 students applied for the Chafee
and were determined eligible; however, 1,115 eligible
applicants did not receive a grant. The second deficiency
is current law is the ability to use the Chafee ETV at
postsecondary institutions that do not meet baseline
performance measures, including acceptable rates of
graduation or loan default payment. Studies have shown
that these often for-profit colleges market specifically to
vulnerable student populations, including veterans and
foster youth, and use their limited financial aid with
little chance of earning a degree."
2) Chafee eligibility requirements. To qualify for a Chafee
Education and Training Voucher (ETV), students must:
a) Be a current or former foster youth, with
dependency established or continued by the court
between ages 16-18.
b) Be under the age of 22 years as of July 1 of the
award year.
Students must fill out the Free Application for Federal
Student Aid, or California Dream Act Application, and the
California Chafee grant application. Currently, there is
no application deadline or guarantee of funds, and
applications are processed on a rolling basis until all
funds are expended. This often results in students not
learning whether they received a grant until well into the
school term.
The Chafee ETV is not an entitlement, unlike the Cal Grant
program. This bill make the Chafee grant an entitlement in
California; an eligible student would be awarded a grant,
regardless of sufficient or available funding.
3) Qualifying institutions. The Chafee ETV may be used at any
eligible California college as well as colleges in other
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states. In California, students may use the Chafee grant
at career and technical schools, California Community
Colleges, the California State University, the University
of California, independent colleges, and private colleges.
Existing law requires postsecondary education institutions to
maintain, in order for students to use Cal Grants to attend
those institutions, a graduation rate above 30% and a
three-year cohort student loan default rate of less than
15.5%. This bill requires institutions to meet the
standards established in statute for participation in the
Cal Grant program.
The changes proposed by this bill could affect existing Chafee
grant recipients if they attend an institution that does
not meet the requirements for qualifying institutions.
Staff recommends an amendment to add a grandfather clause,
thereby allowing existing Chafee recipients to continue
attending their current institution.
4) Administration of the Chafee. The California Student Aid
Commission administers the Chafee ETV, which is funded by
federal and state monies, through a Memorandum of
Understanding (MOU) with the California Department of
Social Services. Staff recommends an amendment to state
intent that the requirements of this bill supplement the
existing requirements of the MOU, thereby ensuring issues
such as maximum program awards are addressed.
5) Funding. In California, the Chafee ETV provides up to
$5,000 in grants to current and former foster youth. The
budget for the program is approximately $11.5 million,
which is evenly split between federal funds ($5.6 million)
and the state General Fund. State funding for the program
is accounted for in the Department of Social Services
budget. The 2016 Budget Act includes an additional $3
million for the Chafee ETV.
The maximum Chafee grant is $5,000 per academic year; the
average awarded grant in 2014-15 was $3,251. The program
serves about 2,228 California students.
6) Fiscal impact. According to the Assembly Appropriations
Committee, this bill imposes:
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a) Estimated additional General Fund costs of $4
million in the first year for entitlement program
awards, based on 1,230 additional awards and an
average award of $3,234. There were 1,115 eligible
applicants that, under the current Chaffee program,
did not receive an award in 2014-15 due to
insufficient resources. In addition, the California
Student Aid Commission (CSAC) indicates that another
845 applicants were deemed ineligible from due to lack
of a single piece of required information. CSAC
expects that new administrative procedures soon to be
implemented to assist such applicants will increase
eligibility, which would lead to an entitlement award.
Annual costs would increase to around $11 million in
the third year and thereafter.
b) Administrative costs (General Fund) to the CSAC
of about $60,000 one-time and $270,000 ongoing for
four positions to implement the entitlement program.
The CSAC indicates that the Chafee program is
relatively labor intensive due to the population it
serves and the need to coordinate among various
agencies.
SUPPORT
Alameda County Court Appointed Special Advocates
California Alliance of Child and Family Services
California CASA
California Community Colleges Chancellor's Office
California State Student Association
California Student Aid Commission
Casa de Amparo
First Place for Youth
Fred Finch Youth Center
iFoster
John Burton Foundation for Children Without Homes
Los Angeles Area Chamber of Commerce
Mission College, Student Enrollment & Financial Services
National Association of Social Workers, California Chapter
National Center for Youth Law
New Alternatives, Inc.
Skyline College, Financial Aid Office
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University of Southern California
VOICES Youth Centers of California
Individuals
OPPOSITION
None received.
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